August 17, 2003

Arnold Schwarzenegger's move into California's bizarre gubernatorial recall election is fulfillment of 'master plan' onetime body-builder set forth for himself 35 years ago, when he came to US from Austria with little English or money, and predicted he would become movie star, make millions of dollars, marry glamorous wife and wield political power; Schwarzenegger was born in Graz in 1947, son of policeman and onetime Nazi party member who intimidated and sometimes beat him, and favored second son, who died in car crash in 1971; producer George Butler, workout partner Franco Columbu and others describe great ambition for power and money; Schwarzenegger's acting career and climb up political and social ladders, including 1986 marriage to Maria Shriver, related; photos; Rabbi Marvin Hier recalls Schwarzenegger's request that Simon Wiesenthal Center investigate his father's Nazi ties, noting that Schwarzeneggers have since given more than $1 million to center (L)

Major Wall Street firms have set up teams of former analysts to monitor e-mail and other activities of their stock analysts in wake of $1.4 billion securities industry settlement over research conflicts of interest; increasingly see research analysts, lionized and viewed as public face of their firms during market boom, as liabilities; are cutting compensation and perks and demanding analysts cover more companies for less pay; some have told analysts they will no longer be judged by ranking in Institutional Investor magazine annual investor polls; photos (M)

ON the 482-yard 18th hole at Oak Hill Country Club yesterday, Tiger Woods's tee shot drifted toward the bunker to the right of the fairway. ''You figure it's in the bunker; no, it's on the downslope in the rough against the grain,'' he would lament later. ''Everything is going with the grain, except for the one strip I'm in. It's against the grain, so I have no shot.''

Church of Jesus Christ of Latter-day Saints will build church on Upper East Side at site of former Youth Residence Center; design will be traditional ecclesiastical with stained-glass windows; photos (M)

Gretchen Morgenson column on huge and growing impact of mortgage-backed securities, which now make up some 35 percent of whole fixed-income market, on mortgage interest rates; notes traders and managers of big portfolios of such securities typically hedge their holdings by selling short Treasury securities, exacerbating moves in interest rates and threatening to produce snowball effect that can push interest rates far lower or higher, and faster, than before; notes mortgage-backed securities respond violently to moves in interest rates, forcing portfolio managers to rebalance hedges; graph comparing size of Treasury and mortgage markets (M)